Renewal of a bank guarantee

[Krupanidhi]

Dear Sirs,

A bank had issued a bank guarantee on 21-01-2012 for a sum of Rs. 4,00,000, for a period from 21-01-2012 to 20-01-2013 on a stamp paper of Rs. 100. 

It has been stated in the guarantee  that, their liability under the bank guarantee shall not exceed Rs. 4,00,000  and the said bank guarantee is valid upto 20-01-2013.

Now, the banker on an application has renewed the guarantee for one more year on  a plain paper (in letter format). Is this renewal a valid one?

kindly enlighten me.

regards.

Krupanidhi

[Sanjeev Pathak]

HI,

 

If your banker has put a condition in the Original BG that the renewal may be done...

 

Than it is valid provided the renewal has been given on the letter head of the Company or under stamp and proper signing authority.

 

Regards

 

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[krupa nidhi]

Thank you so much Sir,

[Sanjeev Pathak]

It not letter head of the Company but teh bank...

[CS Vikram Jhawar]

Whether they wrote extended time period on Letterhead????

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Thanks and Regards

Vikram Jhawar
Practising Company Secretary

V.JHAWAR & CO.

New Delhi

"Effort may fail but don't fail to make effort"